From: Declan McCullagh <declan@well.com>
Date: Wed, 1 Oct 1997 03:21:04 +0800
To: cypherpunks@toad.com
Subject: Till Debt Do Us Part, cost of the CDA, from Netly
Message-ID: <v03007801b056ee5aa478@[204.254.22.167]>
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http://cgi.pathfinder.com/netly/opinion/0,1042,1452,00.html

The Netly News
September 30, 1997 (http://netlynews.com/)

Till Debt Do Us Part
by Declan McCullagh (declan@well.com)

     Ever since challenging the Communications Decency
Act in early 1996, the two coalitions that filed the
lawsuit have appeared unbeatable. Not only did a
Philadelphia court rule that the law violated the
Constitution's guarantees of freedom of speech, but
the Supreme Court unanimously agreed in June.

     Now one group's string of victories may be
ending. The Center for Democracy and Technology (CDT),
which organized the high tech lawsuit, may lose its
final battle: getting reimbursed nearly $600,000 for
money spent on lawyers.

     Under federal law, only nonprofit groups or
corporations worth less than $7 million can request
attorney's fees after successfully challenging an
unconstitutional law. The Department of Justice claims
that since such wealthy firms as America Online,
Microsoft, Apple and CompuServe paid for much of the
lawsuit, CDT should not be reimbursed. The government
has asked for four months to investigate, charging in
court papers that "other entities actually bore the
costs of the litigation and merely funneled money
through" CDT.

     In other words, if Microsoft had hired the
lawyers, Bill Gates couldn't get reimbursed. The DoJ
claims that Microsoft "funneled" the cash through CDT,
which then turned around and asked Uncle Sam for a
check.

     CDT opposes the government's request for
additional time. Documents filed in Philadelphia
district court last Friday show that the money raised
was from a broad coalition of groups, not all of which
expect reimbursement, says CDT's director, Jerry
Berman. "Maybe all the money doesn't qualify, maybe we
can't get all of it back. But certainly the small
associations, CDT's money and the library money ought
to come back."

     A major contributor to the lawsuit (and the lead
plaintiff) was the American Library Association and
the related Freedom to Read Foundation, which spent
$475,000. The total costs of the lawsuit, though,
ballooned to more than $1.3 million, and CDT still
needs to raise $200,000. (CDT can't ask to be
reimbursed for the full amount since its attorneys
charged much more than the $130 an hour the law sets
as an upper limit.)

     Even as CDT faces a tough struggle, the American
Civil Liberties Union -- which led a coalition of nonprofit
groups in a separate but coordinated lawsuit -- is
optimistic about recovering roughly $400,000 in
expenses. "[The law] was exactly intended to encourage
organizations like the ACLU Foundation, which was set
up to handle these kinds of cases on behalf of people
who don't have the resources to handle these cases
themselves," says Barry Steinhardt, the ACLU associate
director.

     Unlike the CDT coalition -- which employed a law
firm and was funded by outside groups -- the ACLU used
its own lawyers and money and has been reimbursed for
similar lawsuits before. Last Friday the ACLU filed
court documents saying it was eligible for attorney's
fees and arguing against delaying its request past
mid-October.

     If CDT receives attorney's fees, the group says
it first will use the money to settle outstanding
bills owed to the Washington law firm of Jenner &
Block, which has capped its fees at $1.1 million.
"Other than payments to Jenner & Block (and possibly
to the ALA), all proceeds will be used by [CDT ] to
further the general goals of... protecting free speech
on the Internet and empowering families who are using
the Internet to protect their children from material
they judge inappropriate," CDT deputy director Danny
Weitzner says in court documents.

     At issue here is the relationship between CDT,
the lawsuit's funders and the Citizens Internet
Empowerment Coalition, a project of CDT. The Justice
Department has asked the CDT plaintiffs to respond to
40 pages of detailed questions and requests to turn
over documents. "The existence and nature of the fee
arrangements among the plaintiffs is critical to
determining whether ineligible parties are the real
parties in interest," the government says. The
"ineligible" parties who helped out: America Online
($130,000), CompuServe ($50,000), Microsoft ($75,000),
Netcom ($10,000), and Prodigy ($75,000).

     Even if CDT and the ACLU can show they qualify
for a check, they have one more hurdle to leap: to
show the Justice Department was wrong to defend the
CDA as constitutional.

     You might think that after enduring 18 months of
humiliating defeats in two district courts and the
Supreme Court, the Clinton administration might be
willing to throw in the towel and admit the law was
brain-dead from the beginning. You'd be wrong.
Unbelievably, the government claims it was correct to
argue all the way to the Supreme Court that the CDA
did not violate the First Amendment. Says the Justice
Department, "Defendants will demonstrate that their
defense of the CDA was substantially justified and
that plaintiffs' requests for fees should be denied on
that basis alone."

###


-------------------------
Declan McCullagh
Time Inc.
The Netly News Network
Washington Correspondent
http://netlynews.com/